To understand market share vs. profits, look no further than Nokia vs. Apple

Apple Online Store “Market share is probably the easiest and most often used point of comparison between competing products. It makes sense: If something has a large share of the market, it’s probably doing well. But that doesn’t always mean that it’s doing better than something with less market share, especially from a business perspective,” MG Siegler writes for TechCrunch.

“I bring this up because today brought some very interesting numbers from the research firm, Strategy Analytics. According to them, Apple has surpassed Nokia as the most profitable phone maker in the world. I’ll throw some numbers at you in a second to show why this is really incredible, but the key takeaway is that this is why, at the end of the day, Apple wins,” Siegler writes.

“While the press and rivals obsess over market share, Apple quietly comes in and makes an insane amount of money. It’s the same in the computer industry. Small market share, huge amount of money. The most important thing for all of these are companies is the bottom line,” Siegler writes. “Apple wins that battle.”

Siegler writes, “According to the report, Apple made $1.6 billion in operating profit off of the iPhone in Q3. Nokia, meanwhile, made $1.1 billion. Let’s put this in perspective. Recent numbers suggest Nokia controls roughly 35% of the worldwide handset market. Apple? About 2.5%.”

Full article here.

MacDailyNews Note: Apple’s share of the smartphone market, the only market in which they compete, is far higher than 2.5%, of course. iPhone’s share of the worldwide smartphone market was pegged at 18% for Q309 by Canalys. Please see related articles below for more info.

28 Comments

  1. Man, I love reading this kind of stuff. I was a subscriber to MacUser Magazine when it folded back in the early Nineties because Apple was on the brink of extinction. I was a Mac fan then and stuck with them. What a comeback story.

  2. Finally some journalist realized that it’s more important to a company to be profitable than to make the most of something.

    The same can be said for Apple’s Mac business as well v. other PC box assemblers (Dell, HP, etc.).

  3. Exactly. Apple has a vastly lower market share than Dell, but its market value is over six times higher. Apple is without question the most efficient tech company out there, and arguably one of the most efficient companies out there, period.

    Great day to be a Mac fan!

  4. Having high profits with low market share also means that their products are very good because they have a premium products and since there is less people to deal with, you have a more personalized support in case you need it (in 10 years I have only call twice to Apple’s tech support).
    “Quality over quantity”

  5. Sorry, have never bought into the less is more argument. With the Mac you get a lot more, i.e. security, iLife, able to run all programs including windows, lower TCO. I have a boss who keeps telling me less is more, what a crock.

    Same with iPhone, because you can actually USE it to do the things the other phones do, but do poorly or take too many steps, or are so deeply hidden you don’t know you can do it.

    I wonder if not for the tight integration with iTunes and the APP store if the wind would still be behind Apples back on the iPhone. Those 100,000 APPS are a huge differentiator, allowing you to do MORE than what the iPhone ships with in a very cost effective manner.

  6. @Apelock: Setting aside the “gouging” slam, Apple’s monetary success is worth celebrating because Apple takes one success and builds future success on top of it.

    The more Apple can innovate with their “ill-gotten” gains, the more great products we can buy in the future, building a cycle of virtue that no one else can match.

    Besides, as Apple fans, who else would we turn to if Apple weren’t around? It’s not as thought Dell and Microsoft are offering a compelling alternative. No Apple means I get to return to Linux (not an awful thing, just a nuisance) and cheap throw-away phones (again, not an awful thing, but I sure value my iPhone). Not sure what I’d do for a portable music experience.

    Most of us witnessed Apple’s slide into irrelevance and to the brink of collapse. This tremendous success story is definitely worth celebrating.

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